Making it Happen: Gwen from Fiery Millennials

My name is Gwen, and I run the Fiery Millennials blog. I’m 26, live in the Midwest, and am the proud slave owner of an adorable kitty cat. When I’m not working or creating content for my blog, I like to participate in a number of activities and hobbies like stained glass, softball, quilting, soccer, knitting, and disc golf.

I got started in real estate when I found Paula Pant’s blog Afford Anything. I thought real estate sounded like an awesome way to accelerate my path to FI. I didn’t actually think about doing anything though until I went to my first Chautauqua and actually got to sit down and talk real estate with Paula herself. Events conspired against me so I had to wait almost 18 months to be able to buy a property.

Real estate is one of the rare investment opportunities around that offer double digit returns regularly. Higher risk, higher reward. For just a few thousand dollars of my own money, I can start bringing in money immediately. I’ve been putting money in the stock market for years and still haven’t seen the kind of returns like I’m getting out of real estate. Investing in the stock market is more like a marathon, whereas real estate is like running a Tough Mudder. Still hard work but of a different variety.

I own one property so far and would like to buy a few more before I’m done. I bought my first property earlier this Spring. It’s a beautiful historic home that was converted into a triplex some years back. Since I live in a pretty low cost of living area, I was able to buy this property for $85,000 and put down 10%. I live in one unit and inherited tenants in the other two units that bring in $1,100 a month in rent.

Since I’m still so new to investing in real estate, I haven’t really seen much of an impact either negatively or positively so far. I mean, I really love the fact I can point to this patch of land and say, “See that beautiful big house right there? I own that!” I also really appreciate having a roof over my head and fewer neighbors. On the other side of the coin, though, is all the stress that comes with owning a home. It was slightly neglected by the previous owner, so I have some work to do around the house. This is the first house I’ve ever owned (only the third I’ve ever lived in) so I’m a bit new to the concept of calling people and getting bids. I don’t want to mess anything up but am aware I have a lot to learn!

I’ve gone through one and a half deals. How does one go through a half deal you ask? Easy. It’s called find a property, make an offer, have it accepted, and then get it derailed by a silly issue. In my case, that was a little thing called zoning. The zoning had reverted to single family housing, so I couldn’t buy the property and rent it out without going through a ton of hassle which is also not what I wanted for my first property.

Both times, though, I used the same process. Keep an eye on the market until I was ready to buy, find a realtor, look at tons of properties and make an offer on one I liked. I like multi-family properties that exceed the 1% rule. I do not look at anything else (with one notable exception but that’s because I drove past it everyday and was the cutest little house ever).

I haven’t made any mistakes to learn from yet that I’m aware of. I slightly regret getting a property that needs so much work right off that bat, but until that’s all wrapped up I won’t really know how that’s going to impact the numbers. It will all pay off later this year when the house is sealed up tight and looking beautiful.

I hope to achieve Financial Independence even earlier with real estate. If I did nothing but worked, I would be done by the time I’m 35. While that is amazing to the average Joe, I am not average. I want to be done with my career in IT as quickly as I can. I have a lot more to do in this world than have my life revolve around work. Having this alternative revenue stream will allow me to do things I find more interesting and fulfilling than my current job. I would love to be able to devote more brain power to crafty things and do things I can’t do right now. What might that be? Something like working at a youth camp over the summer. I did that as a teen and really loved it. I want to pass some of that magic on to the next generation. I would also like to go skiing more often than I do now and think being a ski instructor would be a ton of fun. Get paid (a little) to ski!

My version of FI is not one where I completely stop working. Instead, I want to do fun things that just so happen to pay me. Even if it is only $1400 for a summer’s worth of work.

To someone who may be mulling over dipping their toes in the murky world of real estate, I have one piece of advice. Save way more money than just a down payment. I saved up enough for a down payment and bought a house…… only to discover things had to be taken care of urgently and I needed to have cash on hand. I had to replace both an oven and fridge in the first week of ownership. Fortunately I did have the cash, but I’m running low now. The next property I buy will be with a much larger cash cushion behind me. Rule of thumb is 20% for a downpayment – and I would have at least an extra 5% or $10,000 on hand (which ever is higher). It’s better to save too much, than too little.

7 thoughts on “Making it Happen: Gwen from Fiery Millennials”

  1. I would keep a weather eye out for capital expenses. You’ll need enough liquidity to replace a roof, remodel an apartment, or do mandated repairs if you fail a city-code compliance inspection. High leverage lives alongside high risk and you should be actively working to mitigate/reduce risk.

    Moreover, one of my best real estate investments when I was starting out was the book, “Landlording” by Leigh Robinson http://amzn.to/2qSAX79. It gives an easily accessible summary of what to do when managing rental property.

    1. Hey Steve thanks for the comment. Yeah I will have a hefty cash cushion on hand. My house is old, and old houses don’t come cheap. As I learned when getting bids from all the contractors!

  2. Great point on having extra cash on hand, Gwen. I had $10k ear marked toward the new house. Our washer and dishwasher ended up being moldy – expense fix there. We then had our sump pump fail. Basement carpet gone and new carpet needed to be purchased. Oh, and all of the tools I didn’t acquire living in a townhouse: lawnmower, rake, gardening tools, etc. The joys of homeownership!!

    1. Yes! Exactly! You know, I’m just going to wish the joy of home ownership on my enemies. It sounds nice, but it’s actually terrible!

  3. Hey, I know that girl!! ? Gwen is kicking ass at a young age. I can say that because I kicked some real estate ass at her age also! My story wound up much different (I seriously NEVER considered the housing market could collapse), but she did a fair amount of research before taking the plunge. If there are any other people thinking to do the same, take the advice to be overly prepared for the worst case situation. Tenants not paying, fires, roofs, housing markets (!)…you can’t be too prepared. All that being said, real estate is an awesome vehicle for early retirement if done properly.

    Gwen – loving keeping up with you and all the progress you’re making. Now if only we can get a date together for me to visit!!

    1. Heed her advice! She’s been through real estate hell and came through so much stronger and wiser. I’m lucky to her people like Miss Mazuma around to bounce ideas off of!

      As for the get together…. November??

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